Contract Cases Flashcards

Question

RTS Flexible Systems Ltd v. Molkerei Alois Müller GmbH & Company KG

Answer 1

To determine whether the parties have reached an agreement on all material terms the court applies an objective test, asking whether, in all the circumstances of the case, the parties have agreed all the terms they considered to be a precondition to creating legal relations. All material terms need to be certain and complete for a contract to be upheld.

Answer 2

If an agreement is incomplete or uncertain, a court may not be able to enforce it. Here, the contract terms were too vague and therefore, it was unenforceable.

Answer 3

Not enforcing agreements for being too vague is a last resort. Courts will look to enforce the agreement where possible. Here an agreement to buy “timber of fair quality” had a reasomable meaning, wasn’t too vague and therefore enforced

Answer 4

Establishes the tenet consideration must not be past. The consideration provided by Eastwood (by bringing up Sarah) was not good consideration to support Kenyon's subsequent promise to discharge the debt because it was in the past.

Answer 5

Exception to past consideration test is established: A) The act must have been done at the promisor's request B) The parties must have understood that the act was to be rewarded either by a payment or the conferment of some other benefit. Either expressly agreed or implied The latter is more likely in a commercial context C) The payment, or other benefits, must have been legally enforceable had it been promised in advance

Answer 6

Consideration must move from the promisee: A party who has not provided consideration may not bring an action to enforce a contract. Here, the contract to pay the groom money is between the fathers - and the groom is not party, therefore he is excluded.

Answer 7

Consideration need not be adequate: Courts will not intervere with a bargain freely reached by two parties in good faith. Here, Nestle ran a promotion which included sending in wrappers. Though these were worthless and thrown away by the company, when discussed in a claim for royalties, they were still considered part of the consideration.

Answer 8

Consideration must be sufficient: Here, what is meant, is consideration must have “some value” however miniscule to be considered sufficient. Mrs Thomas’ promise to keep the property in order and the £1 per annum she paid the executor of Mr Thomas’ estate was sufficient, even if not equal in value.

Answer 9

You must provide extra/new consideration. Here, they did not provide extra/new consideration - they were originally contracted to bring back the ship - so there was no case.

Answer 10

Roffey Bros freely renegotiated the contract, there was no duress from the Williams. The payments for work already contracted was their idea. There was new consideration (Roffey Bros avoiding late fee) provided. Payment was deemed necessary.

Answer 11

Establishes that a third party may potentially obtain a benefit from a contract of which it was not party to. This will depend on the comtract. There was sufficient consideration for them to take benefit.

Answer 12

A promise to accept less than your legal rights is unenforceable

Answer 13

You can’t change contracts orally with a NOM even if agreed orally. Sets out the precdent that parties can bind themselves however they want.

Answer 14

This is an exception to Foakes v Beer. There was consideration, despite it being less than previously agreed.

Answer 15

Sets out the test for economic duress: -Lack of practical choice -) illicit pressure -Illicit pressure -) Threat to breach contract? / Good or bad faith? / Did they protest or affirm? -Illicit pressure -) Significant cause (for all intents and purposes the ‘but for’ test): If it had not been for duress, agreement would not have been entered into Did the misrepresentation on DSND’s side lead to PGS signing the contract? Was that economic duress? No. The misrepresentation wasn’t /the reason/ they signed and there was no duress to be found.

Answer 16

Felix took advantage of the time pressure, acted in bad faith and applied illegitimate pressue to Carillion. There was no practical choice for Carillion. Carillion was on a time crunch so had to follow through as no time to get an injuction. They did however practically object via a letter. Therefore, economic duress was successfully proven & conditions satisfied.

Answer 17

Time pressure created by an obligation to a third party. Kafco felt they had no option but to sign, they didn’t truly agree to the new, changed terms. Judgment in favour of Kafco but interestingly enough, they didn’t practically object.

Answer 18

Victor Green Publications were forced into paying & subject to economic duress. However, they took quick and proper action; deducting the sum previously paid from a later invoice. Therefore, any attempts to recoup this money were not possible.

Answer 19

Time pressure created by an obligation to a third party.

Answer 20

HC’s increase of the letter of credit served as consideration for increased payments. NOS only started a case a year later. While HC’s demand for a 10% price increase did amount to economic presure and made the original contract voidable, NOS’s payments without protest affirmed the contract. NOS’s claim based on economic duress thus had to fail. d

Answer 21

Sets out the causation test for economic duress as the ‘but for’ test. The duress must be a significant cause of the victim entering into the contract, in other words, ‘but for’ the illegitimate pressure, the victim would not have entered into the contract.

Answer 22

Went above and beyond after promise of payment. Provided extra consideration by getting the ship back home despite it being an original contracted term because it was dangerous and they were not expected to do so. They needed to be paid. Can contrast with Stilk v Myrick.

Answer 23

Does it deprive the claimant of substantially the whole benefit of the contract? If not, damages are available but not repudiation (or affirmation)

Answer 24

Claimant’s vessels damaged in defendant’s harbour by negligence. There was a limited liability clause with exceptions of theft & fire. Sets precedent that limited clauses are viewed less hostility than total exemption clauses.

Answer 25

Exclusion clause for damage to claimant’s goods in the shed but defendant had to maintain it. Defendant maintains it & negligently burns claimant’s goods. Exclusion clause too ambiguous, defendant liable.

Answer 26

Sets the precedent that contra proferentum rule has very limited application now.

Answer 27

Cooperation required to affirm a contract

Answer 28

There would be no legitimate interest on the innocent party’s side to affirm the contract

Answer 29

Frustration of Contract.

Answer 30

It is for the defendant to prove that the claimant would not have recouped the expenditure had the contract gone ahead

Answer 31

Common law damages for breach of contract cannot be awarded merely for the purpose of depriving the defendant of profits made as a result of the breach, other than in exceptional circumstances.

Answer 32

a) If A entered into a contract with B to do work/supply goods or services to B in return for payment and; b) Before A has completely performed their obligations B has reason to doubt whether A will, or will be able to, complete their obligations; and c) B promises A an additional payment for A's promise to perform their contractual obligations on time; and d) As a result, B gains a benefit/obviates a disbenefit; and e) B's promise is not given because of duress/fraud from A

Answer 33

Payment at a different place/time or of a different thing

Contract Cases Flashcards

(206 cards)